acquisition is a transaction where a TNC buys another company in order to expand (usually a smaller company)
China's open door policy (1978) - allows China foreign industry and TNCS to promote a modern and thriving China
containerisation is a logistical system of transporting large amounts of goods in steel containers , each carrying 25,000kg of goods
core region - wealthier , industrially developed countries that benefit and control global markets , making periphery regions depend on them
cumulative causation - like a multiplier effect , as core regions increase in prosperity , the periphery regions will also grow due to their links with the core
downward transition zones - a country or city with predicted economic decline , industrial reduction or switched off from globalisation (e.g Scotland , Turkey , Brazil
economies of scale - concept of increasingprofits by producing larger amount of products , as overall the avergae price to manufacture each product is lowered
Offshoring is where a TNC moves parts of its production process to other countries. This is often developing countries where production costs (e.g. labour or land) are lower.
two types of services:
high level
low level
invisible goods - goods that can't be seen , heard or touched physically e.g insurance
trade can either be in physical goods , invisible goods or information (e.g video streaming)
trade bloc - trading association supports free trade between member countries without tariffs or charges
countries outside of trade blocs may have to pay extra to trade within bloc
the EU is a trading bloc
barriers to importing + exporting products:
tarriffs
non-tax barriers
outright bans
a tariff is a tax on trading products
non-tariff barriers - e.g quotas (fixed number of goods you can trade at once)
A TNC is a country that operates in at least 2 countries e.g Walmart
TNCs DON'T have a centralised management system in one country
few companies that want to invest in HICS due to less benefits (e.g high wages)
Key groups with power:
G7
EU
China
G7 - seven biggest countries in the world e.g US , Canada , Japan
G20 - twenty most developed countries with the biggest economies e.g Indonesia , Russia
richer countries generally control trade agreements as those who enter agreements with richer countries tend to benefit from their wealth
As richer countries have the upper hand in term of trade , they can pressure low income countries into making more beneficial deals with richer countries.
lower taxes , reduce tariffs , set up SEZ to encourage investment
rich corporations and TNCs can influence trade , may create sanctions on other countries or refuse to trade with them in order to get their way
Special Economic Zones - areas within a country that don't have the same trading regulations as the rest of the country
SEZ have lower tarriffs and lower taxes
SEZ increase access to markets as countries can afford to invest in the area , increasing international trade from that area
countries with less wealth have less access to markets
HIC companies can afford to pay for higher tariffs on exports and imports. Able to ake profits and receive products
HICs increase their access to markets through FDI into foreign markets. Saves companies money through cheaper labor and often avoid tariffs as they produce products within the country (e.g Japanese car manufacturers = production in EU)